Aviva Plc · LSE:AV.
Aviva — Investor Presentation (September 2009)
99 slides from Aviva's investor presentation, September 2009
Slide 1: Investor Presentation September 2009
Investor Presentation September 2009
Slide 2: Disclaimer
Disclaimer This presentation may include oral and written “forward-looking statements” with respect to certain of Aviva’s plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives and results. These forward-looking statements sometime
Slide 3: Contents
Contents Page 1 Overview 4 2 Aviva’s businesses 15 3 Executive management 21 4 Financial strength 23 5 UK life inherited estate reattribution 28 6 UK and Europe 33 7 North America, Asia Pacific and Aviva Investors 79 8 Contacts 98 Investor presentation September 2009 3
Slide 4: Overview
Overview | ft AVIVA
Slide 5: An increasingly global company
An increasingly global company £30 billion H1 2009 sales £24.4bn (1) Asia Pacific 6% 20% 10% General North America 17% Insurance UK GI 9% £15 billion UK Life 21% 80% Long 5% 5% Term 24% Savings Europe 47% 32% 40% 34% H1 2000 H1 2009 (1) Total long-term savings new business sales and G.I. and health
Slide 6: Our strategy
Our strategy Purpose Prosperity & peace of mind Vision One Aviva, twice the value Strategic Targets priorities • Manage composite • 98% meet or beat COR portfolio • £500m cost savings by 2010 • Build global Asset • Double IFRS EPS by 2012 at Management the latest • Allocate capital • 1.5 – 2 x divid
Slide 7: Building a Position of Strength
Building a Position of Strength Taking decisive action Purpose Open to the recovery Prosperity & Delivering peace of mind the Strategy Vision One Aviva, twice the value Creating financial flexibility Strategic Targets priorities Capitalising • Manage composite onmeet • 98% the or beat COR portfolio
Slide 8: Action on the Balance Sheet
Action on the Balance Sheet IGD Solvency Surplus Significantly Strengthened £bn 4.0 (£0.1bn) £0.5bn (£0.3bn) £0.1bn £3.2bn £0.4bn 3.0 £0.2bn (£0.3bn) £0.2bn £0.5bn £2.0bn 2.0 1.0 0 IGD surplus Operating Market Dividends Issue of Issue Sale of DL Value of Increase Other IGD December profits and movem
Slide 9: Action on the Balance Sheet: UK Commercial Mortgages
Action on the Balance Sheet UK Commercial Mortgages - no defaults in H1 2009 30 June 2009 31 Dec 30 June 2008 2009 Total UK Interest service cover 1.30 1.32 Remaining UK Commercial commercial commercial loans property Average loan to value 103% 106% mortgage £8.1bn portfolio portfolio Vacancy rates
Slide 10: Corporate Debt - Shareholder
Corporate Debt - Shareholder A high quality, diverse portfolio • Just over 94% of corporate debt is investment grade or NAIC rated • Minimal movement in rating grades Investor presentation September 2009 10
Slide 11: Focus on Margins vs Sales
Focus on Margins vs Sales Life and Pensions margins maintained Sales Life General and Pensions insurance Margins £18.2bn £17.5bn COR2 12 months 6 months NA/Asia 2008 % 2009 % NA/Asia £3.1bn £15 bn UK 1.7% 2.1% £3.9bn Europe Europe 2.8% 2.6% Life Europe North America 1.0% 0.5% 36% Europe Asia Pacific
Slide 12: Focus on Profit vs Premiums
Focus on Profit vs Premiums General Insurance COR improved NWP £5.1bn General General Insurance insurance CORs COR2 £5 bn £4.9bn NA/Asia 6 months 12 months £0.8bn 2008 % 2009 % NA/Asia £0.9bn UK 99% 99% Europe Europe 97% 96% £1.0bn Europe Life Europe North America 99% 97% 36% DL £1.1bn £3 bn £ 0.5bn
Slide 13: Strong Cost Management
Strong Cost Management £2,700m (£38m) £72m (£80m) £2,622m (£118m) • Ahead of run rate £500 £148m £2,493m million cost saving targets (£75m) £2,500m (£38m) • Eliminating cost over runs and reducing operational complexity in UK Life £2,300m • Closing 13 operational 9.0% - £239m centres and simplifying
Slide 14: Progress with Strategic Allocation of Capital
Progress with Strategic Allocation of Capital Reattribution of the inherited estate • Up to 1 million customers will benefit • Provides £600 million of new business capital in the first 5 years with significant potential upside • 70% response so far* with 96% acceptance Sale of Australian business •
Slide 15: Aviva's businesses
Aviva’s businesses El AVIVA
Slide 16: Manage the composite portfolio
Manage the composite portfolio Diversity, cash flow, resilient product range Long Term savings General Insurance Composite Investor presentation September 2009 16
Slide 17: Aviva Investors
Aviva Investors A powerful global asset management business • Globally integrated asset management business – The third pillar of our composite model, rebranded Aviva Investors – £222 billion funds*, in 15 countries across North America, the UK, Europe and Asia Pacific • Accelerate the transformatio
Slide 18: Increase customer reach
Increase customer reach Access to customers through preferred channels Multi-distribution Direct Sales Bancassurance Independent Agents Investor presentation September 2009 18
Slide 19: Increase customer reach
Increase customer reach Over 90 bancassurance agreements Investor presentation September 2009 19
Slide 20: Growth in Life and Pensions assets by region
Growth In Life and Pensions assets by region Area of bubble = Projected increase Aviva’s presence Life & Pensions Assets CAGR (2007 - 2017) in Life & Pensions assets to 2017 Strong Growing Asia-Pacific (ex. Japan) North America Europe Life & Pensions Assets 2007($bn) Source: Aviva Research supported
Slide 21: Executive management
Executive management _ AVIVA
Slide 22: A highly capable and experienced executive team
A highly capable and experienced executive team Andrew Moss Chief Executive Philip Scott Tom Godlasky Chief Financial Officer North America Andrea Moneta Mark Hodges UK Life Europe Igal Mayer Simon Machell UK GI Asia Pacific Amanda Mackenzie Alain Dromer Marketing Anupam Sahay John Ainley Aviva Inve
Slide 23: Financial strength
Financial strength B AVIVA
Slide 24: MCEV Operating Profit
MCEV Operating Profit New business and in force book both generate strong earnings £m • Operating earnings up 12% 2,000 £312m £17m £(34)m £(17)m to £1,685 million £(63)m £(54)m £1,685m • Life new business increase £15m reflects lower volumes, offset by £1,509m increased group margin 1,500 • Life in-
Slide 25: MCEV Profit After Tax
MCEV Profit After Tax Material decrease in investment losses and provisions MCEV • oÉíìêå=íç=éêçÑáí=çÑ=¡NIMUQ=ãáääáçå= áå=OMMV H1 2009 H1 2008 FY 2008 • kç=êÉéÉ~í=çÑ=áåîÉëíãÉåí=äçëëÉë= £m £m £m ÉñéÉêáÉåÅÉÇ=áå=OMMU Operating profit 1,685 1,509 3,367 • ¡ONU=ãáääáçå=ÉñÅÉéíáçå~ä= êÉÇìÅíáçå=áå=íÜÉ=î~äìÉ=
Slide 26: IFRS Operating Profit
IFRS Operating Profit A lower asset and earnings base £m 1,500 £1,223m £(18)m £17m £(40)m £(16)m £(63)m √ léÉê~íáåÖ=É~êåáåÖë=çÑ=£1,049 1,250 million, down 14% on prior year £(54)m £1,049m √ fãé~Åí=çÑ=ÇÉÄí=Åçëíë=~åÇ= 1,000 éÉåëáçå=mCi=Åçëíë √ fåîÉëíãÉåí=êÉíìêå=Ñçê=çéÉê~íáåÖ= 750 éêçÑáí=Ä~ëÉÇ=çå=NM=óÉ
Slide 27: IFRS Profit After Tax
IFRS Profit After Tax Material decrease in investment losses and provisions IFRS H1 2009 H1 2008 FY 2008 £m £m £m • mêçÑáí=~ÑíÉê=í~ñ=çÑ=¡TQT=ãáääáçå Operating profit 1,049 1,223 2,297 • kç=êÉéÉ~í=çÑ=áåîÉëíãÉåí=äçëëÉë= Investment variances – Long term business 155 (636) (1,631) ÉñéÉêáÉåÅÉÇ=áå=OMMU In
Slide 28: UK life inherited estate reattribution
UK life inherited estate reattribution
Slide 29: Inherited estate reattribution – customer perspective
Inherited estate reattribution – customer perspective • Strong customer story – 1 million customers benefit • Policyholder Advocate supportive • Incentive payment of £400m(1) that increase with the value of estate • Average payment per electing customer of £500(1) (minimum of £200) • 1st June electi
Slide 30: Inherited estate reattribution – shareholder perspective
Inherited estate reattribution – shareholder perspective • New deal reduces incentive payment, flexes with size of estate • Based on average valuation of the estate at the end of June, July and August • Estimated estate value of £1.2bn at 30 June 2009 • Plans in place to offset IGD impact in 2009 •
Slide 31: Inherited estate reattribution – shareholder perspective
Inherited estate reattribution – shareholder perspective Significant capital and earnings benefits: • Provides £600m of new business capital strain funded from reattributed estate in first 5 years • 3 year cash payback • One off £156m MCEV profit • One off £58m IFRS profit • Ongoing IFRS profit c£50
Slide 32: Inherited estate reattribution – shareholder perspective
Inherited estate reattribution – shareholder perspective Significant potential upside: • Post reattribution lapse increase of 1% increase IFRS and MCEV results by £20m • 1% decrease in equity volatility increases IFRS and MCEV results by £15m • 1% recovery in property values increases IFRS and MCEV
Slide 33: UK and Europe
UK and Europe El AVIVA
Slide 34: UK Life
UK Life y AVIVA
Slide 35: UK Life
UK Life Current position H1 2009 Performance • A leading UK Life company, with 11.9% life and pensions • Life and pensions sales 21% lower at £4,735m as a result of market share Q1 2009 (Q1 2008: 11.0%) actions to manage product mix, pricing and costs, and the effect • Broad product reach, top four
Slide 36: UK Life - Significant improvement through operational excellence
UK Life - Significant improvement through operational excellence HY1 08 HY1 09 +/- • Market share increased to 12% from 11% whilst also increasing Life & Pension sales £6,010m £4,735m 21% margins • Management action taken on Margin 1.2% 2.1% 0.9pps product mix, increased pricing (1) £450m £370m 18%
Slide 37: We have delivered our promises
We have delivered our promises • Rationalise costs 9 • Develop the business 9 • Simplify the legacy 9 • Strong balance sheet 9 • Value out of service 9 • Capital efficiency 9 • Manage retention 9 Focussed on priorities, delivering the right things Investor presentation September 2009 37
Slide 38: Trading through the recession
Trading through the recession….. PVNBP £bn Quarterly Sales % Quarterly Market Share 15% 3 14% 13% 2 12% 11% 1 10% 9% 8% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Pension Bonds & other Annuities Protection • Lower sales in a significantly contracting market • Market share incr
Slide 39: … while enhancing returns …
… while enhancing returns … New Business Margin Improvement • Reduced individual pension, group pension and bond commissions 2.5% 2.0% • Growth of fee-based Employee Benefit Consultant business 1.5% • Customer service efficiencies 1.0% 0.5% • E-Commerce enhancements 0.0% • Improved product mix HY1 2
Slide 40: …and moving our mix towards higher margin risk products
…and moving our mix towards higher margin risk products HY1 2008 HY1 2009 • Increase in individual annuities through innovative Other, 4% Other, 3% rating factor pricing • Reduction in BPA proportion due to rigorous Bonds, 26% Bonds, 27% hurdle rate discipline: BPA, 2% ¾ Compelling proposition to 50
Slide 41: Driving up profitability
Driving up profitability 2005 2008 +/- Life & Pensions sales (PVNBP)(1) £9,185m £11,669m +27% Life & Pensions margin(1,2) 2.9% 3.5% +60bp Cost overrun £140m £40m 71% New business IRR 10.6% 14.0% +340bp Existing Business operating return £372m £679m +83% EV operating profit £589m £883m +50% IFRS oper
Slide 42: Widening the income and expense 'jaws'
Widening the income and expense ‘jaws’ Life & Pensions Sales and Operating Expenses 35% L&P Sales 25% • Increasing sales while growing margin 15% • Targeted cost reductions, driving 5% out inefficiencies and reducing operating expenses Growth 2005 2006 2007 2008 2009 -5% • Lower, more flexible and v
Slide 43: Generating capital
Generating capital 2005 2008 +/- New business capital strain(1) £488m £293m -40% Strain % of L&P sales (PVNBP)(2) 5.3% 2.5% -2.8pps Free surplus generation £365m £704m +93% £500m dividend paid over the last three years Delivering value to group (1) New business strain includes initial capital strain
Slide 44: Our focus on annuities is delivering benefits
Our focus on annuities is delivering benefits New Business 2005 2008 +/- Margin 5.2% 9.1% +3.9pps IRR 9.5% 16.7% +7.2pps Payback (years) 12 8 4 yrs Capital strain £m 96 67 -30% Capital strain % 6.1% 2.8% -3.3pps • Extra rating factors (size/postcode/marital status & smoker status) delivering underwr
Slide 45: Our focus on protection is delivering benefits
Our focus on protection is delivering benefits New Business 2005 2008 +/- Margin 9.2% 7.8% -1.4pps IRR 16.5% 23.5% +7.0pps Payback (years) 6 4 2 yrs Capital strain £m 153 58 -62% Capital strain % 12.5% 5.1% -7.4pps • Highly competitive market with downward pressure on core mortgage and term products
Slide 46: Key actions to improve margins in pensions
Key actions to improve margins in pensions New Business 2005 2008 +/- Margin 1.2% 1.6% +0.4pps IRR 8.2% 12.4% +4.2pps Payback (years) 12 9 3 yrs Capital strain £m 148 146 -1% Capital strain % 4.9% 3.2% -1.7pps • Increased operational efficiency reducing new business costs • Commission levels reduced
Slide 47: Key action in place to improve margins in bonds
Key action in place to improve margins in bonds New Business 2005 2008 +/- Margin 0.8% 0.1% -0.7pps IRR 9.7% 7.7% -2.0pps Payback (years) 9 14 5 yrs Capital strain £m 77 26 66% Capital strain % 2.9% 0.8% 2.1pps • Persistency assumptions strengthened • IFA commission rates reduced by 1% Q4 08 • Alloc
Slide 48: Delivering operational excellence
Delivering operational excellence 2005 2009 Q1 +/- UK headcount 12,500 9,200 -26% Policies per headcount 1,032 1,485 +44% Core admin systems 20 4 -80% Value on scale platforms 60% 75% +15pps Distributor service rating 1 star 4 star +3 Customer recommendation score 38% 68% +30pps Employee morale scor
Slide 49: UK Life: an evolving distinctive position
UK Life: an evolving distinctive position 2008 – product positioning Pension 100% Savings 0% Risk 0% NU Savings 100% Pension 0% Risk 100% Consistent strategy & ruthless execution has delivered a distinctive position Investor presentation September 2009 49
Slide 50: Context for strategy: factors shaping the mid term
Context for strategy: factors shaping the mid term Industry past Forces for change Threats & opportunities • Growth funded by Recession • Capital conservation capital • Margin squeeze • Single premium driving RDR & TCF volume • Smaller IFA shop window • IFA channel pre- Distributor dominant consolid
Slide 51: Positioning based on deep insight
Positioning based on deep insight Wealth e bl y lth rs ch By r ta a Ri fo e e r w Lo ers ng m W iev pe or tti Co ch Su Po rn Ge A Ea • Overweight for UK Retired • Strong growth predicted Life Stage Pre-retired • 8.6m unserved • Higher average value Family Non-Family Our heartland is not only distinc
Slide 52: Opportunity from our existing customer base
Opportunity from our existing customer base UK Life customers Existing by source, m(Millions) UK Life Customers 1.3m Direct customers • 40% have no active adviser • Scaling back direct acquisition 3.5m customers • Re-directing advisory resource have IFA 1.4m customers • Generating leads from existin
Slide 53: Opportunity from our unique risk capability
Opportunity from our unique risk capability Strong positions in key product sectors Market share Q1 2009 Underlying market growth • Individual annuity Annuities • Life cover - underprovided UK Unrivalled capability WP Annuities • Mortality and morbidity Protection • Asset / liability expertise • Cut
Slide 54: Opportunity from our momentum in corporate sector
Opportunity from our momentum in corporate sector • Proposition innovation, for example the Pension Tracker e-commerce capability • Average scheme tender and secured case sizes up by at least 25% • 170 new GPP schemes secured in HY1 2009 • BPA foothold achieved, and solid relationships with 20-30 Em
Slide 55: Opportunity from our distribution reach post RDR
Opportunity from our distribution reach post RDR Advisers Today Advisers 2013 UK Life Strategy High net worth £500k + Independents Commercial focus c. 10,000 Mass affluent IFA £100k – £500k c. 21,000 Provision gap Grow in-house channel Middle market £30k – £100k General Advisors Tied / multi tied Le
Slide 56: Our strategic focus
Our strategic focus Scale of customer 1. Capitalise on untapped value from existing customers base opportunity Unrivalled data and 2. Drive significant profitable growth in our Risk business capability Focussing on our All round distinctive 3. Drive significant profitable growth in Corporate sector
Slide 57: UK General Insurance
UK General Insurance | ft AVIVA
Slide 58: UK General insurance
UK General insurance Current position H1 2009 Performance (UK GI only) • Operates in the mature UK market • General insurance operating profit of £247m • Aviva UKGI enjoys a 14% market share - the largest UK • General insurance COR of 99% (H1 2008: 98%) general insurer • General insurance net writte
Slide 59: UK General Insurance – delivering transformational change
UK General Insurance – delivering transformational change A clear strategy focused around a number of key themes • Reshaping our book to maximise our access to customers whilst delivering a Market sustainable distribution ratio Leadership • Transforming the operating model to deliver insurance excel
Slide 60: Summary – our business
Insurance Excellence in UK GI: 'Focus on Profit' Summary – our business Personal Lines • Marketplace - High unemployment levels and pressure on consumer finances drives price sensitivity and switching behaviour - Motor insurance purchase and research via aggregators now well established; beginning t
Slide 61: The UK market leader
Insurance Excellence in UK GI: 'Focus on Profit' The UK market leader Aviva • Consolidated market – top 7 insurers have 13.9% over 50% market share Rest of market • Aviva is the largest P&C insurer in UK 37.7% RBSI (including Direct Line) • Top 1 or 2 position in all our major classes 11.7% • Unique
Slide 62: Unparalleled customer reach
Insurance Excellence in UK GI: 'Focus on Profit' Unparalleled customer reach DIRECT BROKERS PARTNERS 3,000 brokers Powerful brands #1 in the SME market … over 100 others RAC - Best roadside Insurer of the year assistance provider 2006 to 2003 to 2008 2008 Investor presentation September 2009 62
Slide 63: UK GI's strategic priorities
Insurance Excellence in UK GI: 'Focus on Profit' UK GI’s 7 strategic priorities Win the Customer Win the Broker • UKDI fightback • War for distribution • RAC membership • Partnerships moments of truth Building Core Insurance Capability Claims Inflation Busting • Sophisticated pricing • Sustainable b
Slide 64: Reshaping the book
Insurance Excellence in UK GI: 'Focus on Profit' Reshaping the book Direct Fightback Moments of Truth • Profitable & growing • Profitable & growing medium sized brokers smaller brokers • Unique package • Unique package • Increase market • Increase market • Direct is direct share share • Sophisticate
Slide 65: Reshaping the book
Insurance Excellence in UK GI: 'Focus on Profit' Reshaping the book By 2011 our UKGI book will have changed… • Direct grows • Brokers grow • Partnerships fall • RAC steady in Rescue but RAC panel growing significantly • Motor grows • Home falls • Creditor falls • Commercial lines grow Right balance
Slide 66: Building core insurance capability
Insurance Excellence in UK GI: 'Focus on Profit' Building core insurance capability Personal Lines – transforming pricing Credit Make/Model Mass Customisation 3rd Party Data Price Optimisation 21% 120% 3rd PTY DAMAGE 19% 17% 110% Vogue 3rd PTYTotal INJURY 15% 100% Vogue SE Total Total ACC DAMAGE Pre
Slide 67: Delivering the promise of scale
Insurance Excellence in UK GI: 'Focus on Profit' Delivering the promise of scale Self Service Centres of Excellence 2007 2010 c900 Applications <300 Applications Mass Customisation & Lean Manufacturing IT Roadmap Sustainable service excellence & benefit of scale Investor presentation September 2009
Slide 68: Delivering the promise of scale
Insurance Excellence in UK GI: 'Focus on Profit' Delivering the promise of scale • Progress ahead of what was promised in October 2008 Phase 1 Target : £200m One- C&E • Sales & Marketing offs £38m • IT • Support Services Inflation • Change Phase 1 Cost Reduction Phase 2 Target: £150m • Operations On
Slide 69: Summary
Insurance Excellence in UK GI: 'Focus on Profit' Summary Reshaping the book • Focus on profit • Sustainable distribution ratio Building core insurance capability • Sophisticated pricing • Focus on transactional excellence • Cleanse the book of poor performing business • Inflation busting • Expect ra
Slide 70: Aviva Europe
Aviva Europe El AVIVA
Slide 71: Europe – a profitable market leader
Europe – a profitable market leader (Excluding Delta Lloyd) • Strong bancassurance performance limits fall in life and pension sales Scale, growth, • Margins capital -Customer preference for lower margin products with guarantees (With Profits sales 61% in 2009 vs 34% in 2008) • Seize unique growth -
Slide 72: A strong life business and a focussed GI presence
A strong life business and a focussed GI presence France Czech Netherlands 8th (L&P), 14th (GI) 13th (Life) Top 5 (L&P), Top 3 (GI) Ireland Hungary 3rd (L&P), 1st (GI), 3rd (Health) 7th (Life) Poland Romania 2nd (Life), 1st (Pen), 15th (GI) 4th (Pillar II Pensions*), 6th Life Spain Russia** 4th (L&P
Slide 73: France
France Current position HY 2009 Performance • Life: top 10 position in the market (5% UL market share) • Total PVNBP sales of £2.4bn (HY08: £2.1bn) • Life: multi-channel distribution selling comprehensive • Bancassurance channel outperforming the Market by 10% range of savings, pensions, protection
Slide 74: Ireland
Ireland Current position HY 2009 Performance • Largest composite insurer in Ireland • Sales (PVNBP basis) down 39% to £0.4bn consistent with • Combined Hibernian/Ark business ranks 3rd in life and the market (down 40% on APE basis) due to reduced pensions market with 17% market share, 1st in GI with
Slide 75: Italy
Italy Current position HY 2009 Performance • Outperformed both Life and GI market, whilst improving margin and • 6th position in the market with a strong bancassurance COR demonstrating value of bancassurance model presence • PVNBP sales up 68% to £2.2bn reflecting customer demand for • Market leadi
Slide 76: Spain
Spain Current position HY 2009 Performance • 4th position in the market with a strong bancassurance • HY09 performance negatively impacted by the current presence unfavourable economic climate • HY08 included one-off impacts of the Caja Murcia risk • 8% market share portfolio transfer and regular pr
Slide 77: Poland
Poland Current position HY 2009 Performance • Leading long-term savings business since 1992 • Life and pensions sales have declined to £0.6bn (HY08: • Currently 2nd in the life market and 1st in the pension £1.0bn) reflecting high bancassurance sales in 2008. market with over 3.6 million customers •
Slide 78: Netherlands
Netherlands Current position HY 2009 Performance • Top 5 position in the Netherlands and Belgium for new • PVNBP life and pensions sales lower at £1.8bn (HY08: business; also operations in Germany £2.1bn). HY08 included 3 group pension contracts totalling • Multi-channel, multi-label distribution se
Slide 79: North America, Asia Pacific and Aviva Investors
North America, Asia Pacific and Aviva Investors
Slide 80: Aviva North America
Aviva North America | AVIVA
Slide 81: North America - focus on greater capital efficiency
North America - focus on greater capital efficiency • Sustainable footprint in the US having doubled scale in 2008, a year ahead of target Profitable growth • Meeting US customer needs with increased annuity guarantees and unique wellness features in Life products • Optimise • #1 in indexed life ins
Slide 82: North America H1 2009 Performance
North America H1 2009 Performance US Life Volume – PVNBP Canadian GI Volume - NWP IFRS Operating Profit 2,000 1,500 1,000 CAGR 4% * 100 £ millions £ millions 750 £ millions 1,000 500 50 500 250 * - - - Q1 Q2 Q3 Q4 Q1 Q2 H1 2007 H1 2008 H1 2009 H1 2008 H1 2009 2008 2008 2008 2008 2009 2009 A nnuities
Slide 83: North America 2009 Priorities
North America 2009 Priorities North • Focus on profitability, productivity and capital efficiency America • Optimise business mix and margins Region • Diversify distribution and products • Enhance margins and increase new business return on capital Aviva • Focus on capital efficiency USA • Leverage
Slide 84: USA
USA Current position H1 2009 Performance • Doubled sales within two years of acquisition of former • Financial performance affected by economic turmoil AmerUs business and one year ahead of target • Sales reflect consumer demand for products with • Aviva USA became the first provider ever to guarant
Slide 85: Canada
Canada Current position H1 2009 Performance • Canada’s 2nd largest GI provider, with 9% market share • Strong financial performance in H1 2009 • Balanced portfolio of personal, commercial and specialty • NWP increased by 15% to £889m (4% increase on a local lines currency basis) • Top 5 position in
Slide 86: Aviva Asia Pacific
Aviva Asia Pacific | AVIVA
Slide 87: Asia Pacific – Remains an attractive growth region
Asia Pacific – Remains an attractive growth region Asia-Pacific not immune to current economic crisis • Customer confidence continued to drop in H1 2009 • Life and pension sales down 22% from H1 2008 • Investment sales down 29% due to investor caution in volatile markets Scale, growth Asia Pacific r
Slide 88: Aviva Asia Pacific Footprint at a glance
Aviva Asia Pacific Footprint at a glance Must Win markets South Korea Singapore JV: 47:53 with Woori 100% Aviva owned Woori Aviva 100% Life Life, Navigator, Health Hong Kong Taiwan 100% Aviva owned JV: 49:51 with First Group Life, Navigator (w.e.f 16 June 2009) First-Aviva, 100% Life Malaysia Sri La
Slide 89: Building success in Asia Pacific
Building success in Asia Pacific Strategic focus Competitive advantage Prioritised portfolio Bancassurance expertise • Must Win markets: Achieve leading position in China & • More than 50 bancassurance partners in region India. • Contributors: Build on our distribution strengths, • Share best practi
Slide 90: Must Win Markets: China and India
Must Win Markets • Aviva-COFCO Life Insurance (50% Aviva share) launched 1 January 2003. • No.3 in terms of total premium income among foreign players as at end of May 2009*. • Distribution through our direct sales force, agencies, brokers, telemarketing and banks. • 13 non-exclusive bancassurance p
Slide 91: Contributor Markets
Contributor Markets Singapore • DBS partnership deal extended to 2015, will expand to India, China and Taiwan over time. • Sales significantly impacted mainly due to market issues with bank channel sales arising from regulatory undertakings following bank sales of Lehman bonds. Ranked 5th in Singapo
Slide 92: Aviva Investors
Aviva Investors ft AVIVA
Slide 93: Aviva Investors – executing the strategy
Aviva Investors – executing the strategy Significant progress towards developing a global asset Aviva Investors management business • Globally • Launched in September 2008, £222bn funds under management at integrated 30 June 2009 and ranked top 20 institutional investor globally business • Net new b
Slide 94: Aviva Investors today
Aviva Investors today AUM by geography AUM by asset class AUM by client Poland 1.1% Australia 1.7% Other 4.4% Spain 0.4% Intermediary 4.6% Ireland 3.4% Cash 10.7% Institutional North America 10.8% 12.8% Real estate 9.8% Equities France 19.9% 27.6% Fixed income UK 53.0% 55.2% Internal 84.6% £222 bill
Slide 95: Aviva Investors today: profits
Aviva Investors today Proportion of Aviva Investors to Group IFRS operating profits 2,500 FY H1 H1 Operating profit £m 2008 2008 2009 5.0% Aviva Investors 2,000 UK 64 28 14 Profits in £ millions Europe 35 20 15 North America 14 13 8 1,500 Asia 1 - (1) 5.0% Total 114 61 36 3.4% 1,000 Cost: income rat
Slide 96: Business structured to meet client needs
Business structured to meet client needs Investor presentation September 2009 96
Slide 97: Positioned for growth
Positioned for growth Achieved to date: • Third party and cross border sales – progress made in cross border sales • Investment performance - improving, with more work to do • Continuing to transform and integrate the global business • Attracting talent to lead a high performance organisation Invest
Slide 98: Contacts
Contacts B AVIVA
Slide 99: Further contacts
Further contacts Aviva Investor Relations Aviva Media Relations www.aviva.com/investor-relations www.aviva.com/media Charles Barrows Hayley Stimpson External Affairs Director Investor Relations Director hayley.stimpson@aviva.com charles.barrows@aviva.com Sue Winston Head of Group Media Relations Sus